The Westpac-Melbourne Institute Leading Index was at 7.6 per cent in April. This is good news for retailers, as it indicates the likely pace of economic activity three to nine months in the future.
Matthew Hassan, Westpac senior economist, said that this is well above the long term trend of 3 per cent, but is still below levels seen earlier in the year.
“Although the growth rate in the Index remained very strong in April, the month did see moderation from 8.8 per cent in March, a 12.5 year high, to 7.6 per cent in April,” he said.
“This is the first slowing after ten consecutive months of sharp acceleration – the year to March saw the sharpest upturn in the Leading Index since the rebound coming out of the early 80s recession.”
The annualised growth rate of the coincident index was 3.9 per cent for the period. Hassan said that this was above its long term average.
“The level of the Coincident Index increased by 0.8 points (0.3 per cent) in April. Retail trade was up by 0.3 per cent, employment was up 0.3 per cent and the unemployment rate was unchanged,” he said.
Hassan expects that interest rates will be put on hold once again by the Reserve Bank when it meets on 6 July.